United States

United States

Feed-in tariffs in action - New England will be policy test bed

US: Vermont and Maine are quietly turning northern New England into a small-scale testing ground for feed-in tariffs (FITs) - the European policy concept that obliges electric utilities to offer renewable energy generators profitable fixed rate long-term power contracts.

New England is proving a test-bed for FITs
New England is proving a test-bed for FITs

"Vermont's is the first legislated US feed-in tariff," says Lawrence Mott, director of New Generation Partners, a private not-for-profit developer. "If costs go up, then by law, the programme has to raise its prices."

Vermont does not have a renewable energy standard, and Mott believes that the state will never have thousands of megawatts of wind power. So even 50MW of additional wind power in the state is seen as a huge gain, a fact borne out by the 208 project proposals totalling 176MW from commercial and community-based developers received in the first week of Vermont's FIT last October. "I think we saw the feed-in tariff as the Europeans and Ontario saw it - as some very visionary, leading policy that was going to get us somewhere," Mott says.

Vermont, stuck on a state-wide total of 6MW of wind power since 1997, emerged as a FIT leader in the US when the Vermont Energy Act was passed last June. The bill maintains an overall cap of 50MW, limits projects to 2.2MW and prevents large projects being able to be divided to play the system. Rates are set by law and are reviewed every two years.

In Maine, the Community-Based Renewable Energy Act is geared towards community ownership of wind projects. In broad terms, projects up to 10MW and deemed at least 51% community owned are eligible for long-term power contracts worth $0.10/kWh. Maine's programme also has a 50MW overall cap. Legislators are still working on the details.

The legislation, which became law last autumn, emerged following Maine's October 2008 conference for community-owned wind development. Local proponents asked wind experts from around the US to stay and speak to state legislators. "We had a series of meetings with key people," says Sue Jones, founder and president of Community Energy Partners, a Maine renewables consultancy. "We were told to come back with a bold bill."

Jones and her associates prepared a bill, intentionally excluding a FIT. But it was merged with other bills, and the FIT was added at the last minute. "We all said, 'Maine's not ready for that - we're going to lose it all'," she says. "But I think it passed unanimously."

Another factor proved influential. "Our governor went to Germany on a trade mission," says Jones. "From town to town and village to village, he saw turbines everywhere. He came back all excited about it. He really got it."

The effectiveness of Maine's FIT depends on as yet undetermined details. "One is on how the state will implement it, as well as the other incentives in the law," says Jones. "But it's a great step - you have to start somewhere."

FIT laws exist in California and Hawaii but experts say they are not structured with high enough prices to support wind development.

See Community Wind - Policy Boost for citizen-owned projects

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